California Employee Tax Withholding Help

Background

When you pay employees in California, you will need to set up their tax allowances that they entered on their California Employee’s Withholding Allowance Certificate.

For help with Wage Plan Codes, see California Wage Plan Codes.

How to Set Up California Employee Withholding Taxes

1. Go to Payroll > Employees > Employee List > {Employee Name} > Taxes > Edit.  These fields are under the “State and Local Withholding” section.
2. Here is an explanation of these fields:
   • Additional Allowances: The employee can refer to the Worksheet B on the California Employee’s Withholding Allowance Certificate to calculate if any additional allowances can be taken.
   • Filing Status: Select from the filing status choices:
     • Single
     • Married
     • Head of Household – can take 0, 1, or 2 allowances
   • Regular Allowances: Enter the total number of personal allowances based on the employee’s Filing Status above.
   • Supplemental Type: If you pay a bonus or commission as a separate payment from regular wages, you may need to change this field.  Selecting “None expected – tax as regular wages” withholds at the employee’s normal state tax withholding settings.
     • For more information about supplemental types, see the California EDD Sheet about supplemental wage payments.
   • State Additional Withholding:  Enter the additional dollar amount of state income tax to be withheld each pay period.

How to Change an Employee California SDI Exemption

1. Go to Payroll > Employee List > {Employee Name} > Advanced Tax Settings
2. Go to the SDI Exemptions.
3. Click “Add a SDI Exemption.”
4. Click the the correct status Exempt/Not Exempt by clicking the radio button.
5. Add an exemption date, ex: 1/1/2026
6. Click “Save.”

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